Correlation Between SIEM OFFSHORE and CHINA FOODS

Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and CHINA FOODS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SIEM OFFSHORE and CHINA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIEM OFFSHORE NEW and CHINA FOODS UNSPADR20, you can compare the effects of market volatilities on SIEM OFFSHORE and CHINA FOODS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SIEM OFFSHORE with a short position of CHINA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and CHINA FOODS.

Diversification Opportunities for SIEM OFFSHORE and CHINA FOODS

-0.05

Correlation Coefficient

SIEM OFFSHORE  CHINA FOODS

Good diversification

The 3 months correlation between SIEM and CHINA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and CHINA FOODS UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA FOODS UNSPADR20 and SIEM OFFSHORE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SIEM OFFSHORE NEW are associated (or correlated) with CHINA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA FOODS UNSPADR20 has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and CHINA FOODS go up and down completely randomly.

Pair Corralation between SIEM OFFSHORE and CHINA FOODS

Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.18 times more return on investment than CHINA FOODS. However, SIEM OFFSHORE is 1.18 times more volatile than CHINA FOODS UNSPADR20. It trades about 0.03 of its potential returns per unit of risk. CHINA FOODS UNSPADR20 is currently generating about 0.02 per unit of risk. If you would invest  238.00  in SIEM OFFSHORE NEW on September 3, 2024 and sell it today you would earn a total of  7.00  from holding SIEM OFFSHORE NEW or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SIEM OFFSHORE NEW  vs.  CHINA FOODS UNSPADR20

SIEM OFFSHORE NEW

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SIEM OFFSHORE NEW are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, SIEM OFFSHORE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CHINA FOODS UNSPADR20

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA FOODS UNSPADR20 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, CHINA FOODS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIEM OFFSHORE and CHINA FOODS

The main advantage of trading using opposite SIEM OFFSHORE and CHINA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, CHINA FOODS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CHINA FOODS will offset losses from the drop in CHINA FOODS's long position.

The idea behind SIEM OFFSHORE NEW and CHINA FOODS UNSPADR20 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.